This document defines the major risks that the user assumes and accepts by using the automated systems platform (ATS platform onwards), commercialized under the iSystems brand and which development and property rights belong to iBroker Global Markets SV, SA (IGM onwards).
The information contained in the reports within this website is provided with the
objective of "standardizing" automated trading system performance, and is intended
for informational purposes only. It should not be viewed as a solicitation for any
specific trading system or system vendor. As past performance does not guarantee
future results, these results may have no bearing on, and may not be indicative
of, any individual returns realized through participation in this or any other investment.
No part of this website should be considered apart from the Disclosure Documents
and disclaimers contained herein.
Every effort has been made to ensure that the information on this website is accurate and complete, but neither IGM, nor our officers, principals, employees or agents shall be liable to any person for any losses, damages, costs or expenses (including, but not limited to, loss of profits, loss of use, direct, indirect, incidental or consequential damages) resulting from any errors in, omissions of or alterations to the information. The foregoing shall apply regardless of whether a claim arises in contract, tort, negligence, strict liability otherwise.
In instances where qualitative judgments are issued, the opinions expressed are that of the author, and may not necessarily reflect those of IGM, their respective subsidiaries, affiliates, officers or employees. You are urged to draw your own conclusions from the data and analysis presented here and elsewhere.
The risk of loss in trading commodity futures contracts and forex, even when done
via an automated trading system, can be substantial. You should therefore carefully
consider whether such trading is suitable for you in light of your financial condition.
You may sustain a total loss of the initial margin funds and any additional funds
that you deposit with your broker to establish or maintain a position in the commodity
Any specific investment or investment service contained or referred to in this website may not be suitable for all investors. You should not rely on any of the information as a substitute for the exercise of your own skill and judgment in making such a decision on the appropriateness of such investments.
Finally, the ability to withstand losses and to adhere to a particular automated trading system in spite of trading losses are material points which can adversely affect investor performance.
We recommend investors visit the Commodity Futures Trading Commission ("CFTC") website at the following address before trading: http://www.cftc.gov/cftc/cftcbeforetrade.htm
Trading systems can be subject to substantial commission charges and costs for the
purchase or lease of the system. While the numbers within this website include all
such fees, it may be necessary for those accounts that are subject to these charges
to make substantial trading profits in the future to avoid depletion or exhaustion
of their assets. It is important to note that the performance records on this website
are calculated with the listed commission amounts (ranging from $15 to $25), and
commission charges above those levels will result in actual performance much worse
than the reported performance on this website.
All ATS carry risk, even if the long term profitability is positive. There is no perfect system, nor is there a system that always wins. Any investment in ATS carries great risks, and the performance shown should not blind the user from those risks. It is important to note that the worst losing streak of a system is most often yet to come, and can happen when the system is active in the user's account. The market circumstances can change from the period in which the system was designed, and the system’s rules which have given positive returns in the past can start giving negative returns
Trading systems can be subject to substantial commission charges and costs for the purchase or lease of the system. While the numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.
The iSystems Platform as offered through a license with the User’s futures brokerage firm, offers a service to run Automated Trading Systems directly in said User’s futures trading account. This means you, the user, may choose, through controls in the Platform, for your account to be automatically operated following the buy and sell signals generated by one or more ATS.
There are three types of ATS available to the user:
The buy and sell signals of the ATS are generated via real-time market data broadcast
to IGM through various vendors of real-time financial information, and these signals
generate orders that are in turn sent back to the futures exchanges hosting said
markets, without human intervention, from IGM servers. Rapid and unexpected movements
in prices and/or failures in their diffusion, can generate buy and sell signals
that result in gains or losses larger than expected, and are always independent
of what may have happened in the historical period analyzed by the user.
IGM performs the execution of these orders (the buy and sell signals generated by the ATS) for User’s account on a "not held" basis, meaning IGM shall not be held responsible for the execution of the order at the price indicated or otherwise; and shall not be responsible for the performance of the ATS, including any potential trading losses the user may sustain as a result of use of the ATS.
In particular, IGM is not responsible for any damages that may result from incorrect functioning of the ATS as well as any technical problem external to IGM servers such as mechanical or communication line failure, or system errors, or any other cause beyond its control; and can accept and execute orders only if actually received or generated; expressly declining liability for any malfunction of ATS, the telephone network, hosting services and technical support of the ATS.
Because the iSystems technology ‘syncs’ ATS orders with the open positions in your account, it is of great importance that User’s do not attempt to place any orders directly into their iSystems account via calling their broker or placing an order on an online system. The resulting trade fill outside of the iSystems platform could cause sync issues which could result in additional trades and trading losses. User specifically agrees to not place any trades in their iSystems account and to assume any and all risks and losses resulting from placing such trades.
The user assumes the use of the iSystems technology for the implementation of the ATS he or she requests to activate, accepts as their own all operations performed by ATS and exempts IGM from any responsibilities in the economic result that these operations may generate.
IGM makes no guarantee, implied or otherwise as to the information provided to investors by third party trading system vendors outside of the iSystems Platform through their respective websites or otherwise. As such, use of these third party trading systems is at the investors own risk and you acknowledge and agree that IGM is not responsible for any shortcomings, errors in charging or billing, misrepresentations, or any other wrongdoing on the part of the owner of said third party trading system(s). IGM recommends investors review the trading system vendors' policies regarding privacy, billing, errors and omissions, etc. before investing.
The iSystems Platform enables Users to activate one or more ATS for trading in their
account and set a Multiplier whereby the number of contracts traded on all signals
will be multiplied by the chosen multiplier. For example, if the chosen system trades
2 contracts per signal and the user choose a multiplier of 4, then 8 contracts (2*4)
will be executed on the next signal.
Upon activation of an ATS, or change in multiplier, and on every subsequent trading session the system remains active for a User, IGM will instruct the Broker firm at which the User’s account is held to withhold a margin amount from the account to cover margin and potential losses for that trading session. This amount may vary for future sessions with changes in market conditions, exchange margins, or the risk profile of the system.
At the start of each trading session, we will verify if a User’s account balance covers all the required minimums for the ATS activated by the User. If the balance is below what is required, the platform will automatically deactivate systems until the balance meets the required minimum. The priority for systems being deactivated will be those systems with no open positions first, sorted by most recently activated to least recently activated (longest active), and then those systems with open positions, sorted in the same manner.
IGM shall not be responsible for any loss, damage, or expense directly or indirectly caused by delays and/or failures in the processing, management, activation, multiplier change, and auto deactivation of ATS as outlined above. In addition, IGM shall not be responsible for any loss, damage, or expense directly or indirectly caused by the withholding of a margin amount for the trading of ATS User has activated using the iSystems Platform.
The trading system performance on this website is calculated via trades generated
on three data sets: 1. Backtested, 2. Real-Time, and where available 3. Client Fills.
Backtested Trades are generated by running a trading system backwards in time, and seeing what trades would have been done in the past when applied to backadjusted data. Real-Time Trades are generated by running the trading system forwards on data each and every day absent any intervention from the system developer, and logging the trades as they happen in real time day after day. Client Fill Trades are generated by running the trading system on LIVE tick data for at least one actual client and tracking the actual buy and sell prices those clients trading the system receive in their account.
Client Fill Trades are used to calculate monthly returns for any month in which clients were trading for the entire month, Real-Time Trades for those months in which there are no client fills for the entire month, and Backtested Trades for those months occurring before we loaded the system onto our trade servers.
Note that the Client Fill Trades are reported across all clients utilizing the platform, across multiple brokers, and are not based solely on the performance of accounts at this brokerage.
No matter which data set s used, the calculated results are hypothetical in that they represent returns in a model account. The model account rises or falls by the single contract profit and loss achieved by the system in whichever data set is available. The hypothetical model account begins with the Suggested Capital level listed, and is reset to that amount each month.
The Suggested Capital number shown on the platform is calculated based on a proprietary risk analysis methodology designed by IGM which results in a suggested starting capital amount roughly 3 times the expected maximum drawdown of the trading system. (However, no guarantee, expressed or implied, is given that the system can not lose more than 1/3 of the suggested capital amount. Indeed, as the disclaimer above states - you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain a position in the commodity futures market.)
The percentage returns reflect inclusion of commissions, slippage, fees, and the cost of the system. The monthly cost deduction = number of monthly trades * listed commission + listed slippage value. The monthly cost of the system is subtracted from the net profit/loss prior to calculating the percentage return.
Slippage is the difference between where a trading system signal believes it was filled and where the client actually got filled. Slippage is a result of the spread between the bid and offer in a market [while a signal uses the last price as a trigger, that price is usually unattainable - with buyers having to pay the offer price (higher than the last price) and sellers having to sell at the bid price (lower than the last price)], the type of orders used, data latency, the time of day orders are generated, the number of contracts being traded on a system, and more.
In order to provide the most realistic information about the past performance of a system possible, IGM is not content to merely use a single estimate for slippage across every market and trading system. Instead, For real-time or Backtested trades which have not been executed in real accounts, IGM applies the difference between the Real-Time Trades and Client Fill Trades witnessed on all other trading systems utilizing the same futures market with at least one customer actively trading (the slippage) over the past 50 trading sessions; resulting in a dynamic slippage number which reflects the volatility in the market, investor participation, and more.
The trading system performance data on this website may change at any time without warning due to several circumstances, including but not limited to refreshes of market data used to calculate system signals, upgrades or changes to the system code by its developer, changes to the minimum investment amount, commissions, or slippage estimates, and more.
The actual percentage gains/losses experienced by investors will vary depending on many factors, including, but not limited to: starting account balances, market behavior, the duration and extent of investor participation (whether or not all signals are taken) in the specified system, and money management techniques.
It is important to note that the method of resetting the model account to the Suggested Capital amount at the start of each month creates a track record which is representative of the simple returns for each time period, but that it does not, by definition, show how returns would compound over time. Should an investor following any trading system listed within this website trading a single contract indefinitely without also resetting their account to the initial capital amount each month, their performance will differ from the performance detailed herein.
Please read carefully the CFTC required disclaimer regarding hypothetical results
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK OF ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.
Putting combinations of automated trading systems together in a portfolio creates a hypothetical past performance track record, as the combined performance was created after the fact. Even a portfolio whose components each have track records which are 100% actual, and are not hypothetical, must still be considered hypothetical, as the components may not have traded together in the manner shown. The hypothetical performance of a custom portfolio should not be considered separate from the respective disclosure documents associated with the portfolio's components. As always, past performance is not necessarily indicative of future results.
COMPOSITE HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY MULTI-ADVISOR MANAGED ACCOUNT OR POOL WILL OR IS LIKELY TO ACHIEVE A COMPOSITE PERFORMANCE RECORD SIMILAR TO THAT SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN A HYPOTHETICAL COMPOSITE PERFORMANCE RECORD AND THE ACTUAL RECORD SUBSEQUENTLY ACHIEVED.
ONE OF THE LIMITATIONS OF A HYPOTHETICAL COMPOSITE PERFORMANCE RECORD IS THAT DECISIONS RELATING TO THE SELECTION OF TRADING ADVISORS AND THE ALLOCATION OF ASSETS AMONG THOSE ADVISORS WERE MADE WITH THE BENEFIT OF HINDSIGHT BASED UPON THE HISTORICAL RATES OF RETURN OF THE SELECTED TRADING ADVISORS.
THEREFORE, COMPOSITE PERFORMANCE RECORDS INVARIABLY SHOW POSITIVE RATES OF RETURN. ANOTHER INHERENT LIMITATION ON THESE RESULTS IS THAT THE ALLOCATION DECISIONS REFLECTED IN THE PERFORMANCE RECORD WERE NOT MADE UNDER ACTUAL MARKET CONDITIONS AND, THEREFORE, CANNOT COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FURTHERMORE, THE COMPOSITE PERFORMANCE RECORD MAY BE DISTORTED BECAUSE THE ALLOCATION OF ASSETS CHANGES FROM TIME TO TIME AND THESE ADJUSTMENTS ARE NOT REFLECTED IN THE COMPOSITE.
THESE PERFORMANCE TABLES AND RESULTS ARE HYPOTHETICAL IN NATURE AND DO NOT REPRESENT TRADING IN ACTUAL ACCOUNTS.
Security measures and reasonable precautions that customers should take when accessing their online accounts: